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REAL ESTATE What To Do ????

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ProInvestor

New Contributor
Aug 15, 2007
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Australia
Gday (one guess from where I come from.... apart from the RD forums ;> ),

Here is an interesting dilemma I have:

Own 7 houses, bought for under $50K (with mortgages around $50K).

Could sell for $120K, however I would have to spend around $7K+ (say up to $10K) on each (sell on open market).

OR

Rent said houses to Gov/Company (very secure) for around $180 (so would have to still spend $7K+. Probably willing to sign 2/3yr contract with CPI increases.

OR

Rent for $140K and do no repairs, 2/3yr contract with CPI.

If I sign just a 2 yr contract and then sell the Gov/Company will prob. be pretty pissed off with me, so thats something I want to avoid big time. 3yrs they probably would be less pissed.

So any thoughts???
 

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Yankees338

Bronze Contributor
Jul 24, 2007
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Congrats Lucifer and all of our members -- we have our 100th member! Welcome!

I don't know if it's just my lack of knowledge or the wording of your question, but I don't understand it...
 

AroundTheWorld

Be in the Moment
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Jul 24, 2007
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If you might want to hold them as rentals, we need more information....

What is your debt service?
What are your other expenses related to the property?

Also... how is the market in your area? Can they really be sold for 120, or will they sit there for a year?
 

andviv

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Speedway Pass
Jul 27, 2007
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Mixed from the first and second option. Rent for $180, and then sell the package of homes to other investors that want a property with a secure lease so they know for sure how much they will get every month. Sounds like a great position to be in.

Welcome aboard!!!
 

ProInvestor

New Contributor
Aug 15, 2007
82
11
15
Australia
Wow 100th member. Not as good as #1 member tho... i guess more congrats to MJ than to me.
---
"What is your debt service?"
>LTV is around 50%; All mortgages are around $50K. So $50K mortgage = $5K (roughly)

"What are your other expenses related to the property?"
>I include a rate of 10% and IO loans so all expense are kind of bundled in the $5K....

"Also... how is the market in your area? Can they really be sold for 120, or will they sit there for a year?"
>Can be sold even higher but more money have to be spent on repairs, because I have so many in the general area I would be looking at a longer while.

---
My thinking is just to do them up rent to Gov/Comp for the 7 houses and the rest to pensioners (gov will pay me directly).

I was L/O but many people fell over, it was good, but now just rather rent 'em (esp. with secure rent payments).

Sell to investors, at $120K they stop being +CF however our market the ethos is Neg Gearing is the only way to invest! But still could sell in package, will have to think about that.....

Thanks for all your comments in opening up this...

PLEASE ADD MORE!!! :thankyousign:
 

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